Mattereum Asset Passports help buyers, sellers, and experts to work together to create a doubt-free environment for trade by ensuring authenticity.
In the world of art and antiquities, curators and dealers try to compile everything that it is possible to know about an object, since doing so will not only enhance and reinforce its cultural value, but also (especially for the dealers) its monetary value. A doodle on a napkin may not seem very interesting or valuable, however, if it was drawn by Picasso in 1930 to pay his bill at a café, then an otherwise insignificant object becomes very significant indeed.
Provenance, the history of ownership of an item, is another vital aspect of an object’s overall identity which can have an enormous impact on its value. Understanding where an object has been is essential for a number of reasons. A pair of limited-edition Air Jordans is very different from a pair of the same which Jordan actually wore when the Bulls won the championship. For manufactured goods, it could mean the difference between a properly made product and one where corners were cut and quality standards ignored. Provenance also provides information about an object’s past which could have important ramifications. If the object was stolen, created using prohibited materials, or produced in illegal or unethical conditions, unaware owners might not be able to escape trouble by simply pleading ignorance.
The same is true for any object: by assembling a complete data set of descriptors, an informed decision can be made that reflects its true value.
How can we tell whether the doodle on the napkin is a genuine Picasso? Today, the authenticity of an object in many sectors is determined by experts. However even the most knowledgeable expert can make a mistake and when this happens, apart from some damage to the expert’s reputation, the buyer often has little to no means of seeking compensation for the error or misleading information.
The smart contracts contained in the Mattereum Asset Passport provide a solution to this asymmetric dynamic. Expert opinions regarding all aspects of an object are gathered and are further supported by indemnities such that they are liable to pay if their statement turns out to be false, which may be further backed by indemnity insurance. This adds an extra layer of protection for buyers and an extra layer of deterrence for fraud: if an assertion made about an object is found to be untrue, the buyer is compensated.
All of the information for the Asset Passport is converted into XML format along with digital copies of the relevant physical documentation. Each point of information (“certification”) is supported by contracts affirming the validity of the assertion, and committing to an indemnity for that assertion proportionate to the value of the object, the impact of the information on the object’s identity, and the degree of certainty the owner is willing to claim. With this data placed on the blockchain, and the appropriate smart contracts created to support the certifications, the cartridge’s Asset Passport is generated.
Each certification is backed up by a smart contract stating the nature of the indemnity the certifier is willing to place behind their statement. Additionally, certifiers can set a fee that must be paid in order to activate a certification so that subsequent owners can enjoy the coverage offered. And, yes, current owners can set fees for their certifications as well, so that they can continue to profit from their knowledge even after the object has been sold on to several future owners.